The bank does not accept "blackmail and pressure from large retailers' lobby."
If the parliament adopts bills on a non-market mechanism for regulating interchange and acquiring fees, which is being actively lobbied by large trading companies, annual direct losses to the state budget could amount to at least UAH 4 billion.
Deputy Chair of the Privatbank Board Razvan Munteanu says the projected drop in the bank's profit will be up to UAH 5.3 billion per year, which will annually cost the state, as PrivatBank's owner, UAH 3.3 billion in dividends, the bank's press service reports.
According to the top manager of Ukraine's largest bank, the use of a non-market approach to the regulation of fees will lead to a significant drop in the number and volume of non-cash transactions – from 55.2% to 25.6%, and, accordingly, an increase in cash flow, which will nullify the government's efforts to fiscalize business. Direct annual budget losses from tax shortage will amount to another UAH 1 billion.
"We don't accept blackmail and pressure from large retailers' lobby, and we offer open and transparent information to the market regarding the volume and average size of acquiring and interchange fees, the volume of cash and non-cash payments, the volume of investment in the development and support of payment infrastructure, innovation and loyalty programs for consumers," the press service quoted Munteanu as saying.
Disabling Apple Pay and Google Pay
Munteanu warns that, if legislators pass bills on the non-market regulation of bank fees for accepting non-cash payments, Ukrainian banks will be forced to sever support of well-known world payment services, such as Apple Pay as such transactions will become unprofitable.
He noted that banks would be forced to stop allowing vendors to accept payments by Apple Pay or Google Pay due to the high cost of transactions, taking into account additional fees for services and issuers' expenses.
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According to the banker, if Parliament approves regulation of banking fees, the cost of servicing cards for customers will increase, as banks will also have to raise the cost of their services.
Thus, the cost of card servicing will be on average more than UAH 200 per year, which will be tangible for socially vulnerable population strata (pensioners, staff of budget-funded institutions etc).
In addition, if the law on the regulation of the cost of non-cash transactions is adopted, banks will be forced to cancel the grace period for credit cards, which will lead to a higher cost of loans servicing by an average of 3-3.5% per month.
The battle for acquiring fees in Ukraine: Background
Ukrainian businesses have united, appealing to the Verkhovna Rada to harmonize Ukrainian legislation with the EU norms in the field of reducing tariffs for transactions via payment cards, supporting Bill No. 4364 in terms of reducing the acquiring and interchange fees.
On February 19, 2021, Parliament adopted Bill No. 4364 at first reading.
In turn, the banking sector has been opposing legislative regulation of acquiring fees.
The National Bank stated concern over the discussion related to the need for legislative regulation of interbank fees, which could lead to negative implications for the payment market.
Vira Platonova, Director of Visa Office for the CIS and South East Europe, said that the requirements of the said bill are directed against consumers, who will bear the cost of servicing the non-cash infrastructure. She noted that, according to the company's survey, 70% of Ukrainians are not ready to give up cashbacks and bank bonuses, none of the respondents are ready to pay for card servicing, while at the same time about 60% say that amid the pandemic they've been opting for e-commerce more actively. Platonova stressed that Ukraine is one of the champions in terms of financial sector innovation, but the introduction of such regulation could slow down progress in this area.